Goldman Sachs to post $400 million hit to third-quarter results as it unwinds consumer business
Goldman Sachs Faces $400 Million Hit in Q3, Unwinds Consumer Business #
Goldman Sachs is set to experience a significant financial impact in its third-quarter results as it continues to dismantle its consumer business. The bank is expected to post a pretax hit of approximately $400 million.
The financial institution’s decision to divest its GM Card business and a separate loan portfolio will result in a revenue decrease when it reports its quarterly results. This move is part of the bank’s ongoing efforts to pivot away from its consumer operations, which began in late 2022.
The bank’s foray into consumer retail, particularly its credit card business, led to rapid growth in retail lending but also resulted in losses and regulatory challenges. As a result, Goldman Sachs is now shifting its focus towards asset and wealth management to drive growth.
In addition to the impact from unwinding its consumer business, Goldman Sachs is also facing challenges in its trading division. The bank anticipates a 10% decline in trading revenue for the quarter, attributed to tough year-over-year comparisons and difficult trading conditions in August, especially in fixed-income markets.
These developments highlight the ongoing strategic shifts and challenges faced by the investment bank as it adapts to changing market conditions and refocuses its business priorities.